Teva Pharmaceuticals offers $40bn to buy Mylan

On Tuesday Teva Pharmaceuticals offered $40 billion to buy the generic drugmaker Mylan. The bid comes after weeks of speculation that Teva, the world's largest generic company, would make a bid for Mylan, reports Reuters. Teva said the stock-and-cash offer of $82 a share represented a 48 percent premium to Mylan's stock price on March 10, which it said was the last day of trading prior to the widespread speculation. Mylan was not immediately available for comment, but has said it is not interested in a deal. Executive Chairman Robert Coury said in a statement on Friday that Mylan was committed to the $29 billion offer it made earlier this month for Perrigo.

If combined, the companies would have annual revenue of about $ 30 billion and earnings before interest, taxes, depreciation and amortization of about $9 billion, notes the New York Times. “Our proposal would provide Teva stockholders with very attractive strategic and financial benefits and Mylan stockholders with a substantial premium and immediate value for their shares, as well as the opportunity to participate in the significant upside potential of the combined company – one that would transform the global generics space and leverage it to hold a unique leadership position in the pharmaceutical industry,” Mr. Vigodman said. Teva was complimentary of Mylan, refraining from the combative language that has recently characterized some tense takeover attempts in the drug industry.

Earlier this month, Mylan set up a mechanism under Dutch securities law that could make a takeover tougher, writes Bloomberg. The company issued an option that lets an external foundation acquire a majority stake in Mylan at any time, providing a way to block an acquirer from taking control.

Generic-drug makers announced or completed more than $100 billion in deals last year, worth five times more than any year since at least 2005. Dealmaking was spurred by low interest rates and a drive by companies to relocate to more favorable tax domiciles. In last year’s largest deal, Actavis Plc in November agreed to buy Botox maker Allergan Inc. for about $65 billion.